Phoenix quadruples money on fashion icon

Hicks Muse (Europe) has acquired a majority stake in fashion shoe retailer Jimmy Choo in a transaction valued at £101m.

The European arm of Dallas-headquartered buyout firm Hicks Muse Tate & Furst has acquired a majority stake in iconic fashion retailer Jimmy Choo in a transaction valuing the company at £101 million (€144 million; $188 million).

Under the deal, UK mid-market firm Phoenix Equity Partners has fully realised its 2001 investment in the company. In 2001, Phoenix invested £9 million for a 51 percent stake in the firm alongside entrepreneur Robert Bensoussan.

According to Phoenix's managing partner Hugh Lenon, the approximately £35 million that the firm will receive from the transaction equate to a return of 3.8 times the firm’s original investment and an IRR of 55 percent.

Commenting on the transaction to PEO, Hicks Muse's director of investor relations Kelly Mayer explained the attractions of the Jimmy Choo business: “It’s one of the few iconic global brands in the luxury goods market and consistent with our focus on consumer branded products.”

Jimmy Choo opened its first store in London in 1997 and has expanded its range from shoes to bags and small leather goods. The company's iconic status was boosted by its association with long-running US comedy series 'Sex And The City' and currently has annual sales of approximately £40 million.

The London office of Hicks Muse (Europe) opened in 1998. The firm has invested approximately €2 billion in companies in Europe since then. It is currently raising its second European buyout fund, which is expected to close in early 2005.

In July, Hicks Muse announced a change to its compensation structure, with the US team getting all the carry from US deals and the European team getting around 93 percent of the carry from European deals.

The firm also now operates two separate investment committees, headed by Jack Furst in the US and John Muse and Lyndon Lea in London.

Thomas Hicks, co-founder of the firm said at an annual investor conference in October that he will step down as chairman of the firm on December 31, months ahead of his originally scheduled departure date.